Medicare Program; Coverage and Administrative Policies for Clinical Diagnostic Laboratory Tests; Intent to Form Negotiated Rulemaking Committee

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Chapter IV

[HCFA-3250-NOI]

RIN 0938-AI92

Medicare Program; Coverage and Administrative Policies for

Clinical Diagnostic Laboratory Tests; Intent to Form Negotiated

Rulemaking Committee

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice of Intent to Form Negotiated Rulemaking Committee and

Notice of Meetings.

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SUMMARY: The Balanced Budget Act of 1997 requires the Secretary to

establish a Negotiated Rulemaking Committee under the Negotiated

Rulemaking Act and the Federal Advisory Committee Act. The Negotiated

Rulemaking Committee's (the Committee) purpose will be to negotiate

national coverage and administrative policies for clinical diagnostic

laboratory tests under Part B of the Medicare program as required by

the Balanced Budget Act of 1997 (BBA). The Committee will consist of

representatives of interested parties that are likely to be

significantly affected by the proposed rule. The Committee will be

assisted by a neutral facilitator.

The BBA outlines the scope of issues to be negotiated by the

Committee. We specifically request pubic comment as to whether we have

identified the interests that will be affected by key issues listed

below.

DATES: Comments and requests for representation or for membership on

the

[[Page 30167]]

Committee will be considered if we receive them at the appropriate

address provided below, no later than 5 p.m. on July 6, 1998.

The first meeting will be held at Turf Valley Hotel in Ellicott

City (Baltimore) at 9 a.m. on July 13, 14, and 15, 1998; (410) 465-

1500.

ADDRESSES: Mail written comments and requests for representation or for

membership on the Committee, or nominations of another person for

membership on the Committee (1 original and 3 copies) to the following

address: Health Care Financing Administration, Department of health and

Human Services, Attention: HCFA-3250-N, P.O. Box 26688, Baltimore, MD

21207-5187.

Mail a separate copy of written comments to the following address:

Grant Bagley, M.D., Director, Coverage and Analysis Group, Office of

Clinical Standards and Quality, Mail Stop S3-02-01, Health Care

Financing Administration, 7500 Security Blvd., Baltimore, Maryland

21244-1850.

If you prefer, you may deliver your written comments, applications,

or nominations (1 original and 3 copies) to one of the following

addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW,

Washington, DC 20201, or

Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

For information on electronic filing, see SUPPLEMENTARY

INFORMATION.

FOR FURTHER INFORMATION CONTACT:

Grant Bagley, M.D., (410) 786-7176, or Jackie Sheridan (410) 786-4635,

for general issues related to clinical diagnostic Laboratory tests.

Judy Ballard, (202) 690-7419, or Nancy Rubenstein, (202) 690-8246,

Conveners.

SUPPLEMENTARY INFORMATION: Comments may also be submitted

electronically to the following e-mail address: (filecode

hcfa3250noi)hcfa.gov. E-mail comments must include the full name and

address of the sender, and must be submitted to the referenced address

in order to be considered. All comments must be incorporated in the e-

mail message because we may not be able to access attachments.

Electronically submitted comment will be available for public

inspection at the Independence Avenue address, below. Because of

staffing and resource limitations, we cannot accept comments by

facsimile (FAX) transmission. In commenting, please refer to file code

HCFA-3250-NOI. Comments received timely will be available for public

inspection as they are received, generally beginning approximately 3

weeks after publication of a document, in Room 309-G of the

Department's offices at 300 Independence Avenue, SW, Washington, DC.,

on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone:

(202) 690-7890).

Copies: To order copies of the Federal Register containing this

document, send your request to: New Orders, Superintendent of

Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date

of the issue requested and enclose a check or money order payable to

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and modem to call

I. Balanced Budget Act of 1997

Section 4554(b)(1) of the Balanced Budget Act of 1997 (BBA), Public

Law 105-33, mandates adoption, by January 1, 1999, of national coverage

and administrative policies for clinical diagnostic laboratory tests

under Part B of title XVIII of the Social Security Act using negotiated

rulemaking. Section 4554(b)(2) provides that these national policies

must be ``designed to promote program integrity and national uniformity

and simplify administrative requirements with respect to clinical

diagnostic laboratory tests'' payable under Part B in connection with

the following:

Beneficiary information required to be submitted with each

claim or order for laboratory tests;

The medical conditions for which a laboratory test is

reasonable and necessary;

The appropriate use of procedure codes in billing for a

laboratory test, including the unbundling of laboratory services;

The medical documentation that is required by a Medicare

contractor at the time a claim is submitted for a laboratory test;

Recordkeeping requirements in addition to any information

required to be submitted with a claim, including physicians'

obligations regarding such requirements;

Procedures for filing claims and for providing remittances

by electronic media; and

Limitation on frequency of coverage for the same tests

performed on the same individual.

The legislative history of BBA suggests that section 4554

was enacted in response to variations among carriers' requirements for

laboratories filing claims for payment.

II. Negotiated Rulemaking Process

Section 4554 of the BBA provides that these negotiations take place

within the framework of the Negotiated Rulemaking Act (Pub. L. 101-648,

5 U.S.C. 561-570). Under the Negotiated Rulemaking Act, the head of an

agency generally must consider whether--

There is a need for a rule;

There are a limited number of identifiable interests that

will be significantly affected by the rule;

There is a reasonable likelihood that a committee can be

convened with a balanced representation of persons who--

+ Can adequately represent the interests identified; and

+ Are willing to negotiate in good faith to reach a consensus on

the proposed rule;

There is a reasonable likelihood that a committee will

reach a consensus on the proposed rule within a fixed period of time;

The negotiated rulemaking procedure will not unreasonably

delay the notice of proposed rulemaking and the issuance of a final

rule;

The agency has adequate resources and is willing to commit

such resources, including technical assistance, to the Committee; and

The agency, to the maximum extent possible, consistent

with the legal obligations of the agency, will use the consensus of the

Committee with respect to the proposed rule as the basis for the rule

proposed by the agency for notice and comment.

Negotiations are conducted by a Committee chartered under the

Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2). The Committee

includes

[[Page 30168]]

an agency representative and is assisted by a neutral facilitator. The

goal of the Committee is to reach consensus on the language or content

of a rule. If consensus is reached, it is used as the basis of the

agency's proposal. The process does not affect otherwise applicable

procedural requirements of the FACA, the Administrative Procedure Act,

and other statutes.

The Negotiated Rulemaking Act permits (but does not require) an

agency to use the services of an impartial convener to assist the

agency in identifying interests that will be significantly affected by

the proposed rule, including residents of rural areas, and conducting

discussions with persons representing the identified interests to

ascertain whether the establishment of a negotiated rulemaking

committee is feasible and appropriate in the particular rulemaking. At

the agency's request, the convener also ascertains the names of persons

who are willing and qualified to represent interests that will be

significantly affected by the rule. The agency may also ask the

convener to recommend a process for the negotiations. The convener

submits a written report, which is available to the public. Pursuant to

this procedure authorized by the Negotiated Rulemaking Act, we asked

Judy Ballard and Nancy Rubenstein, who are with the Departmental

Appeals Board (DAB) to act as convener for the negotiated rulemaking on

laboratory policies. Over the last several months, they met with a wide

range of organizations that were identified as having a possible

interest in this negotiated rulemaking. They submitted to HCFA a report

based on those convening interviews, which serves as a basis for this

notice. This report lists the proposed representatives on the

Committee. The convening report is a public document and may be found

on the HCFA Internet website at http://www.hcfa.gov/quality/qlty-8a.

III. Subject and Scope of the Rule

A. General

During the convening process, a number of issues were presented by

the interested parties for negotiations as described below. We believe

it is important to have an opportunity to engage in discussions with

the interested parties on the issues that were presented. Many of these

issues need clarification and a common understanding before regulations

can be developed. We believe it is important that the Committee

meetings include ample opportunity for such clarifications.

Many of the issues raised by identified interested parties were

based on the current laboratory coverage policies and claims processing

systems. It is important to take into consideration how these current

processes have been affected by the changes mandated by other

subsections of section 4554 of the BBA. This provision of the law

likely will mitigate some of the problems identified. For example, the

law permits a carrier to develop and implement interim policies for

laboratory services when there is a demonstrated need for a policy due

to aberrant utilization or provision of unnecessary tests. The law

provides that interim national policies developed by carriers are

effective for no more than two years when no national policies exist,

and provides an opportunity for public participation in the biennial

review of national policies.

As outlined in section 4554(b) of the BBA, the scope of the rule

will be the development of coverage and administrative policies for

clinical laboratory services that are designed to promote program

integrity and national uniformity while simplifying administrative

requirements. Consensus related to administrative simplification for

laboratory services must comply with the limitations imposed by the

administrative simplification provisions in section 261 of the Health

Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA

requires the Secretary to establish standards and requirements for the

electronic transmission of claims and other information that will be

used throughout the health insurance industry.

Given that there are limited time and resources for these

negotiations, it is critical that a process for coverage policy

concerning laboratory tests be developed. Clearly, time constraints may

prevent the development of test-specific policies for all laboratory

tests. HCFA, therefore, proposes that the Committee negotiate a process

for coverage and administration capable of uniform application

throughout the country that takes into account the statutory boundaries

within which HCFA must administer the Medicare program.

Many of the issues identified during the convening interviews

related to administrative policies associated with claims submission,

documentation, and recordkeeping. These administrative issues will be

negotiated to the extent that they are within the framework of section

4554(b) of the BBA as discussed below.

B. Issues and Questions to be Resolved

1. Beneficiary Information on Claims

Under current Medicare policy, laboratory tests furnished in

physicians' offices and by independent laboratories are reported on a

HCFA-1500, while hospital laboratory services are reported on a UB-92

form. Virtually all claims from independent clinical laboratories,

hospital laboratories, and a substantial number of claims for

laboratory services performed in physician office laboratories are

submitted using electronic versions of these forms.

During the convening process, interested parties raised issues

regarding application of general Medicare coverage and administrative

policies to the laboratory industry. Two specific issues interviewees

wished to negotiate concerned the documentation necessary to

substantiate that skilled nursing care patients were in beds certified

as skilled nursing facilities for Medicare purposes (and consequently,

subject to rebundling), and the use of the standard form HCFA-1500 for

submitting Medicare claims for laboratory services. To the extent that

these issues are directly related to the categories of items delineated

in section 4554(b)(2) of the BBA, they are within the scope of the

negotiations. Thus, the applicability of general Medicare policies

regarding beneficiary information required on claims for laboratory

services is within the framework of these negotiations.

2. Medical Conditions for Which a Laboratory Test is Covered

Section 4554 of the BBA mandates that HCFA use the negotiated

rulemaking process to develop national coverage and administrative

policies for clinical diagnostic laboratory tests under Medicare Part

B. While HCFA and the clinical laboratory industry understand and

support the need for national uniformity in terms of policy, both

recognize the practical difficulty of addressing and developing

coverage policies for all laboratory tests within the time provided in

the negotiated rulemaking process. As a result, the Committee will

focus on negotiating the medical conditions for which specific tests

are covered for a subset of tests that have been identified as

priorities by the Committee members after the process for making this

determination has been negotiated.

In the interest of expediting this phase in the negotiation

process, HCFA proposes that the facilitator work with Committee members

prior to the first meeting to develop a recommended list of tests that

will be specifically discussed during the negotiations. We

[[Page 30169]]

expect that those tests designated as priorities by the Committee will

likely fulfill at least one of the following criteria:

It is subject to wide divergence in coverage among local

Medicare carriers,

It is a high-volume test, or

Its medical utility or clinical effectiveness is

considered controversial.

The Committee will negotiate and reach consensus on a list of

priority tests. Using a process developed by the Committee, the

Committee will then negotiate and attempt to reach consensus on the

medical condition for which these specific tests will be covered.

3. Use of Appropriate Procedure Codes in Billing

Laboratory services are reported to HCFA using the HCFA Common

Procedure Coding System (HCPCS). A major component of this system is

the American Medical Association's Current Procedural Terminology

(CPT). In addition, HCFA requires diagnosis reporting on all claims.

Diagnosis is coded using the International Classification of Diseases,

Ninth Edition, Clinical Modification (ICD-9-CM).

Medicare contractors that process claims are charged with the

development of local medical review policies to apply safeguards

against inappropriate expenditures of program funds. Local policies are

a means of applying local coverage decisions where national policies do

not exist. Unlike most national coverage policies, which are generally

narrative statements, nearly all local medical review policies are at

the code-specific level.

We recognize that the level of understanding of coding conventions

is not uniform among the laboratory industry, community physicians

ordering clinical diagnostic testing, and our contractors. Clearly,

there is some confusion and misunderstanding among the parties with

regard to application of the coding guidelines to specific

circumstances. For example, during convening, interviewees reported

that historically there have been problems with coding multichannel

automated testing.

This is an issue of application of general Medicare policies to the

laboratory industry. HCFA believes that it is appropriate for the

Committee to discuss specific coding guidelines to seek clarification

as part of the development of specific national coverage and

administrative policies for laboratory tests identified as priorities.

Thus, for example, it may be appropriate for the Committee to negotiate

policies for automated multichannel testing, including clarification of

coding guidelines. To the extent that coding issues are related to the

coverage policies under discussion, they are within the scope of the

negotiations.

4. Medical Documentation Required with Claim

During the convening interviews, interested parties identified

issues with respect to the medical documentation required on a claim.

One issue dealt with the documentation the physician should submit to

the laboratory in order for the laboratory to submit the claim. Another

issue concerned assuring consistent action by the contractors when the

documentation submitted with the claims is insufficient.

We believe the first issue of medical documentation requirements

would be an inherent part of the negotiations of individual coverage

policies. That is, if the Committee determines that coverage policy for

a given tests should be developed on a diagnosis code-specific level,

then reporting of the diagnosis code would be required for that policy.

In other situations, the Committee could determine that a code was not

satisfactorily specific for the coverage policy, so alternative

documentation may be required. The Committee may also determine that

coverage policy should be established more broadly using a narrative

format rather than a detailed policy developed on a code-specific

level. Clearly, this issue will be discussed in depth as part of the

negotiations on the national coverage policies.

The second issue concerning contractor actions in response to

insufficient documentation was suggested as an issue for negotiation. A

broad view of the language of section 4554(b) of the BBA places this

issue within the scope of the negotiations. Therefore, we are willing

to have this matter brought before the Committee for discussion.

5. Recordkeeping Requirements in Addition to Claims Information

During the convening interviews, the issue of recordkeeping and

retention by laboratories and physicians who order laboratory tests was

raised. We believe that it is appropriate to negotiate with respect to

the types of records that should be maintained, who bears

responsibility for maintaining documentation, and the period of time

that records should be stored. In this regard, we are currently working

under an initiative to reduce paperwork burden on the public, including

clinical laboratories. We share the sentiment expressed by many

interested parties that the recordkeeping requirements should be

nationally uniform, simple, consistent with patient confidentiality

requirements, and that a balance should be developed between program

integrity concerns and the burden placed on the provider.

6. Procedures for Filing Claims and Providing Remittances

Electronically

Electronic claims submission is within the scope of these

negotiations as outlined by section 4554(b)(2) of the BBA. Consensus

related to administrative simplification must comply with section 261

of HIPAA. Two specific issues were presented in regard to this topic.

First, interested parties have voiced concern about the lack of

uniformity among the carriers in the way claims are reviewed. For

example, there is variation in how many and in what order the ICD-9-CM

diagnosis codes are reviewed to determine if they justify medical

necessity. Second, there is a concern that there may be a future

requirement for electronic filing of claims. While cost laboratories

already file claims electronically, small laboratories, including

physician office laboratories, are concerned that such electronic

filing may become mandatory in the future and would be burdensome.

With regard to the lack of uniformity in the way in which carrier

systems review claims, we acknowledge that differences exist in the way

contractor systems analyze claims and that these differences do result

in inconsistencies that are particularly problematic for the Laboratory

industry. We note that the two events will significantly improve this

situation over the next several years. First, under section 4554(b), we

will be implementing new national laboratory coverage and

administrative policies that will be negotiated by this Committee.

Second, Medicare contractors will be moving to a single standard

carrier claims processing system and a single standard fiscal

intermediary claims processing system over the next several years. It

is our intention that modifications to the local standard systems will

be minimal and based on need. Use of uniform claims processing systems

will significantly increase the uniformity in claims review.

Labroatories within a carrier jurisdiction will be informed of the

transition as it becomes imminent in the area so that they can prepare

for the change. HCFA believes that it is important for the interested

parties to be well informed about the transition. We

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appreciate the opportunity to discuss this further with the interested

parties.

It should be noted that there have been several legislative

proposals over recent years that would require electronic claims filing

or provide for a service fee for processing of paper claims. However,

we are not adverse to discussing the possibility of administrative

policies related to mandatory electronic claims filing.

7. Limitations on Frequency of Coverage

Several of the interested parties raised the issue of disclosure of

utilization parameters used as a trigger to perform medical review as a

topic for negotiation. They believe that some contractors are using

utilization parameters as a frequency limit on coverage, which makes

them de facto coverage policies and subject to negotiations. They noted

the lack of uniformity among the contractors complicates this issue

further because providers may be submitting claims to more than one

contractor and have no assurances that these claims will be similarly

reviewed. A test that may be paid by one contractor may not be paid by

another.

We recognize that differences among Medicare contractors in

frequency limits on coverage pose difficulties, especially for large

national laboratories that deal with a variety of Medicare contractors.

We expect that frequency limits as they apply to coverage policies will

be negotiated by the interested parties as part of the discussions.

It should be noted that the Department of Health and Human

Services, which includes HCFA and the Office of the Inspector General

(OIG), has concerns related to disclosure of utilization parameters and

its impact on our ability to assure program integrity and manage

program expenditures. Nonetheless, we acknowledge that section

4554(b)(2) of the BBA does require negotiations related to frequency

limitations. We appreciate the opportunity to discuss alternatives for

meeting the needs of the program to assure program integrity while also

addressing the industry's concerns.

Moreover, section 4554(b)(4) provides: ``the Secretary shall permit

any carrier to develop and implement interim policies of the type

described in paragraph (1) [coverage and administrative polices under

negotiation], in accordance with guidelines established by the

Secretary, in cases in which a uniform national policy has not been

established under this subsection and there is a need for a policy to

respond to aberrant utilization or provision of unnecessary tests.''

C. Other Issues and Questions

Section 4554(b)(2) of the BBA and the Negotiated Rulemaking Act

provide the framework for determining the scope of issues to be

negotiated. Issues that are not included within the seven issues

directly specified in section 4554(b)(2), such as Food and Drug

Administration (FDA) approval of laboratory tests, Medicare payment

policies, and Clinical Laboratory Improvement Act (CLIA) matters are

not within the scope of these negotiations. Based on a review of the

BBA and the Negotiated Rulemaking Act, we have concluded that the

following issues specifically raised in the convening report are not

within the scope of the negotiated rulemaking mandated by Congress, and

thus will not be subject to negotiations by the Committee.

1. Use of Requisition Forms

During the convening interviews, some of the interested parties

raised the issue of a standard requisition form for ordering laboratory

services as a means of standardizing information exchange. If the

laboratory community believes that standardized requisition forms are

needed, HCFA would appreciate the opportunity to provide input in

developing these forms to assure that the information collected on the

standard requisitions meets all the Medicare claim requirements.

However, we believe that the Medicare program's interest is limited

to information necessary to allow a determination regarding Medicare

benefits and does not extend to how information is exchanged among

providers, physicians and suppliers.

2. Enforcement of Physician Reporting

The interested parties suggested discussing sanctions or other

enforcement mechanisms for physicians who do not provide the required

documentation to the laboratory. We do not believe this is within the

areas authorized for rulemaking outlined under section 4554 (b)(2) of

the BBA. Moreover, we do not believe the law authorizes such

enforcement. That is, section 4317 of the BBA requires physicians and

other practitioners to include diagnostic information with their

laboratory orders when such information is required by HCFA or a

contractor in order for the laboratory performing the test to get paid.

However, the statute does not expressly authorize sanctions for

violations of this requirements. Further, HCFA does not have the

resources to monitor and develop the necessary record to pursue

sanctions or other disciplinary mechanisms.

3. Advance Beneficiary Notice

When a determination is made under section 1862(a)(1) that a

service is not reasonable or necessary, a beneficiary may have

liability waived under section 1879 of the Social Security Act. The

beneficiary will be liable, however, if he or she has received written

notice of noncoverage in advance of receiving the service. These

provisions are already in regulations at 42 CFR 411.404. The written

notice is called advance beneficiary notice (ABN).

Interested parties to these negotiations told the convener that

there is a wide divergence in practices regarding when ABNs are

obtained for noncovered laboratory services. Moreover, since

laboratories seldom have direct patient contact, they have little to no

control over the information that is provided to the beneficiary.

Although we are also concerned about this issue, we do not believe

that the policies related to ABNs are within the scope of these

negotiations. It does not appear related to the provisions identified

in Section 4554(b)(2) of the BBA. However, we understand there appears

to be significant confusion related to the ABN policies. We agree that

it would be beneficial to the negotiations to provide time for

clarification of these policies and discuss their applicability to the

laboratory industry. As a result, we would be agreeable to a discussion

on ABNs if the Committee requests it.

4. Elimination of Local Coverage Policy

Most of the interested parties contacted raised the issue of

consistency in local coverage policies for laboratory services as an

area for negotiation. Some strongly believe that local policies should

not be permitted as they are inconsistent with the goal of promoting

national uniformity. Other interested parties believe there may be

local practice patterns or other conditions that would justify

differences in evaluating medical necessity.

Section 4554(b) clearly authorizes local coverage policies as

necessary to assure program integrity. Specifically, section 4554(b)(4)

states: ``After the date the Secretary first implements such national

policies, the Secretary shall permit any carrier to develop and

implement interim policies * * *, in cases in which a uniform national

policy has not been established under this subsection and there is a

demonstrated need for a policy to

[[Page 30171]]

respond to aberrant utilization or provision of unnecessary tests.''

Since the statute clearly authorizes local policies when there is a

demonstrated need to respond to aberrant utilization or the provision

of unnecessary tests, we believe it would be inappropriate to open the

issue of eliminating local policies to negotiation.

We are confident that the policies resulting from these

negotiations and the provisions in section 4554(b) of the BBA will be

extremely beneficial in mitigating the inconsistencies in laboratory

coverage policies throughout the country. Since one of the likely

criteria for prioritization of laboratory tests for discussion is the

extent of national inconsistency, we believe that the negotiation on

specific laboratory tests will likely address tests where there is

currently the greatest variation in coverage among local carriers.

However, we also believe the statute is clear in its intent to provide

the authority for carriers to institute local policies in areas where

there is demonstrated need to respond to potential abuse.

5. Screening Tests

Section 1862(a)(7) of the Act prohibits payment for routine

physical checkups. In addition, section 1862(a)(1)(A) of the Act

prohibits payment for services that are not reasonable and necessary

for the treatment of illness or injury. HCFA has interpreted these

provisions as supporting the exclusion of coverage for general

screening services under the Medicare program. Historically, HCFA has

interpreted ``screening'' as those services furnished in the absence of

signs or symptoms indicating potential illness or injury. We believe

the Congress' actions in adding coverage of specific screening

services, such as pap smears, mammography, colorectal screening,

through legislation rather than extending coverage to all screening

services, supports its continuing intent to exclude other screening

services from Medicare coverage.

Several of the interested parties reported during the convening

process that HCFA's policy on what constitutes screening is unclear and

misunderstood. For example, one representative suggested distinguishing

screening tests from those tests used to establish a baseline value,

tests for a population that is susceptible to a particular condition,

tests used to rule out a condition, and tests used to monitor

medication. Other representatives cited coding conventions and testing

results as complicating issues.

HCFA acknowledges that there has been confusion and inconsistency

among the contractors in interpreting the policy regarding screening

testing. For example, baseline testing is not considered screening

where an illness or injury is identified and baseline testing is

necessary prior to initiation of therapy to monitor the effectiveness

of the treatment. Similarly, testing used for monitoring the

effectiveness of a medication that the patient is taking would not be

considered screening.

The issue of interpretive guidelines for screening services

involves a broader consistency of the medical community than the

interested parties identified for this clinical laboratory negotiated

rulemaking. For example, radiologists may be affected by any provision

that would be negotiated regarding screening tests, yet not have a

sufficient interest in this rulemaking proceeding to be included on

this Committee. We believe that it would be inappropriate to engage in

negotiation without the participation of all parties that would be

significantly affected. Given that the Committee for this negotiated

rulemaking does not include the full complement of interested parties

for development of a rule related to screening services and that this

item is not within the guidelines explicit in section 4554(b)(2) of the

BBA, we do not believe that screening services should be included

within the scope of the negotiations.

In determining that the general interpretation of screening

services is not within the scope of these negotiations, we do not

intend to preclude the development of individual laboratory coverage

policies related to specific screening testing. If the Committee

decides to develop laboratory coverage policy that distinguishes

between screening and diagnostic uses of a specific test, that action

would be within the scope of these negotiations.

IV. Affected Interests and Potential Participants

In addition to our participation on the Committee, the Conveners

have proposed and we agree to accept representatives from the following

organizations as negotiation participants, some of which are coalitions

of two or more groups:

American Association of Bioanalysts

American Association for Clinical Chemistry

American Association of Retired Persons

American Clinical Laboratory Association

American Health Information Management Association

American Medical Association

American Medical Group Association

American Society of Clinical Pathologists

American Society of Internal Medicine

College of American Pathologists

Clinical Laboratory Management Association

Health Industry Manufacturers Association

Medical Group Management Association

National Medical Association

We have determined that various types of laboratories, laboratory

managers, physicians, and Medicare beneficiaries are likely to be

significantly affected by the rule. These groups would be significantly

and directly affected by coverage policies for clinical diagnostic

laboratory tests, as well as by documentation and administrative

policies for such tests. Group practices would be affected both because

they operate laboratories and because they would be subject to any

physician documentation or recordkeeping requirements imposed. Coding

and recordkeeping issues also affect medical record specialists.

Finally, to the extent that coverage of new tests will be affected by

this rule to be negotiated, manufacturers of clinical diagnostic

laboratory tests are like to be significantly affected.

We would also like to note that Medicare contractors, which are

those entities that adjudicate claims in local regions, will provide

technical information to the negotiator representing HCFA. Since we

consider the contractors to be agents of HCFA, we believe that they are

most efficiently and effectively utilized in this manner rather than as

negotiators in the process.

This document gives notice of this process to other potential

participants and affords them the opportunity to request that they be

considered for membership on the Committee. Persons who will be

significantly affected by this rule may apply for or nominate another

person for membership on the Committee to represent such interests by

submitting comments to this notice. Any application or nomination must

include:

The name of the applicant or nominee and a description of

the interests such person represents;

Evidence that the applicant or nominee is authorized to

represent parties related to the interests the person proposes to

represent;

A written commitment that the applicant or nominee will

actively participate in the negotiations in good faith; and

The reasons that the applicant or nominee believe that

their interests are

[[Page 30172]]

sufficiently different from the persons or entities listed above so as

not to be adequately represented on the Committee as currently

proposed.

Individuals representing the proposed organizations and health

industry sectors should have practical experience, be recognized in

their particular community, have the ability to engage in negotiations

that lead to consensus, and be able to fully represent the views of the

interests they represent. We reserve the right to refuse

representatives who do no possess these characteristics. Given the

limited time frame for the development of this rule, we expect that the

negotiations will be intensive. Representatives must be prepared and

committed to fully participate in the negotiations in an attempt to

reach consensus on the issues discussed. We are establishing an

Internet site on our home page (http://www.hcfa.gov/quality), which

will carry the names of Committee members as well as other meeting

information. We invite public comment on this list of negotiation

participants.

The intent in establishing the Committee is that all interests are

represented, not necessarily all parties. We believe this proposed list

of participants represents all interests associated with adoption of

national coverage and administrative policies for clinical diagnostic

laboratory tests. In determining whether a party had a significant

interest and was represented, we considered groups who have and will

continue to actively represent the main provider groups, Lastly, while

we are obligated to assure that all interests that are significantly

affected are adequately represented, it is critical to the Committee's

success that it be kept to a manageable size, particularly because of

the short time frame in which the Committee must complete its task.

V. Schedule for the Negotiations

We have set a deadline of six months beginning with the date of the

first meeting for the Committee to complete work on the proposed rule.

The first meeting of the negotiated rulemaking Committee is

scheduled for July 13, 14, and 15, 1998, at Turf Valley Hotel in

Ellicott City (Baltimore) beginning at 9 a.m. The purpose of this

meeting will be to discuss in detail how the negotiations will proceed

and how the Committee will function. The Committee will agree to ground

rules for Committee operations, will determine how best to address the

principal issues, and, if time permits, will begin to address those

issues.

A second meeting is scheduled for July 28, 29, and 30, 1998 at the

Turf Valley Hotel in Ellicott City (Baltimore). Again, the meetings

will begin at 9 a.m. We expect that by this meeting the Committee can

complete action on any procedural matters remaining from the

organizational meeting and either begin or continue to address the

issues. Six subsequent meetings will be held as follows: August 25, 26,

and 27 at the Phoenix Park Hotel in Washington, DC (1-800-824-5419);

September 14, 15, and 16 in Washington, DC; October 6, 7, and 8 at the

Turf Valley Hotel in Ellicott City (Baltimore); October 26, 27, and 28

at the Turf Valley Hotel in Ellicott City; November 18, 19, and 20 at

the Phoenix Park Hotel in Washington, DC and December 8, 9, and 10 at

the Phoenix Part Hotel in Washington, DC.

All meetings will begin at 9 a.m. and end at approximately 5 p.m.

During these meetings, the Committee will continue to address the

issues within the scope of the negotiations as described in this

document. More detailed agenda for each meeting will be available on

the HCFA Internet Home Page (http://www.hcfa.gov/quality/qlty-8a)

preceding each meeting date.

VI. Formation of the Negotiating Committee

A. Procedure for Establishing an Advisory Committee

As a general rule, an agency of the Federal Government is required

to comply with the requirements of FACA when it establishes or uses a

group that includes non-Federal members as a source of advice. Under

FACA, an advisory committee begins negotiations only after it is

chartered. This process is underway.

B. Participants

The number of participants in the group is estimated to be 15 and

should not exceed 25 participants. A number larger than this could make

it difficult to conduct effective negotiations within the timeframe

required by the statute. One purpose of this notice is to determine

whether the proposed rule would significantly affect interests not

adequately represented by the proposed participants. We do not believe

that each potentially affected organization or individual must

necessarily have its own representative. However, each interest must be

adequately represented. Moreover, the group as a whole should reflect a

proper balance of mix of interests.

C. Requests for Representation

If, in response to this notice, an additional individual or

representative of an interest requests membership or representation on

the Committee, we will determine, in consultation with the conveners,

whether that individual or representative should be added to the

Committee. We will make that decision based on whether the individual

or interest--

Would be significantly affected by the rule, and

Is already adequately represented in the negotiating

group.

D. Establishing the Committee

After reviewing any comments on this Notice and any requests,

applications or nominations for representation, we will take the final

steps to form the Committee.

VII. Negotiation Procedures

The following procedures and guidelines will apply to the

Committee, unless they are modified as a result of comments received on

this notice or during the negotiating process.

A. Facilitator

We will use a neutral facilitator. The facilitator will not be

involved with the substantive development or enforcement of the

regulation. The facilitator's role will be to--

Chair negotiating sessions in an impartial manner;

Help the negotiation process run smoothly;

Help participants define issues and reach consensus; and

Manage the keeping of the Committee's minutes and records.

We propose to use Judy Ballard and Nancy Rubenstein of the HHS

Departmental Appeals Board as the facilitators.

B. Good Faith Negotiations

Participants must be willing to negotiate in good faith and be

authorized to do so. We believe this may best be accomplished by

selecting senior officials as participants. We believe senior officials

are best suited to represent the interests and viewpoints of their

organizations. This applies to us as well, and we are designating Grant

Bagley, M.D., Director of the Coverage and Analysis Group, in our

Office of Clinical Standards and Quality to represent HCFA.

C. Administrative Support

We will supply logistical, administrative, and management support.

We will provide technical support to the Committee in gathering

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and analyzing additional data or information as needed.

D. Meetings

Meetings will be held in the Baltimore/Washington area at either

the Phoenix Park Hotel in Washington, DC, or at the Turf Valley Hotel

in Ellicott City (Baltimore area) on the dates noted above. More

detailed agenda for each meeting will be publicly available on the HCFA

Home Page of the Internet (http://www.HCFA.gov/quality/qlty-8a). Unless

announced otherwise, meetings are open to the public.

E. Committee Procedures

Under the general guidance and direction of the facilitator, and

subject to any applicable legal requirements, the members will

establish the detailed procedures for Committee meetings that they

consider most appropriate.

F. Defining Consensus

The goal of the negotiating process is consensus. Under the

Negotiated Rulemaking Act, consensus generally means that each interest

concurs in the result unless the term is defined otherwise by the

Committee. We expect the participants to fashion their working

definition of this term.

G. Failure of Advisory Committee to Reach Consensus

If the Committee fails to reach consensus, the Committee may

transmit a report specifying any areas on which consensus was reached,

and may include in the report any information, recommendations, or

other materials that it considers appropriate. Additionally, any

Committee member may include such information in an addendum to a

report.

If any Committee member withdraws, the remaining Committee members

will evaluate whether the Committee should continue.

H. Record of Meetings

In accordance with FACA's requirements, minutes of all committee

meetings will be kept. The minutes will be placed in the public

rulemaking record and Internet site on our home page.

I. Other Information

In accordance with the provisions of Executive Order 12866 this

notice was reviewed by the Office of Management and Budget.

(Catalog of Federal Domestic Assistance Program No. 93.773,

Medicare--Hospital Insurance; and Program No. 93.774, Medicare--

Supplementary Medical Insurance)

Dated: May 1, 1998.

Nancy-Ann Min DeParle,

Deputy Administrator, Health Care Financing Administration.

Approved: May 28, 1998.

Donna E. Shalala,

Secretary.

[FR Doc. 98-14798 Filed 6-2-98; 8:45 am]

BILLING CODE 4120-01-M